TRADE UPDATE

Food & Agriculture
Jan. 7, 2025

By Kristy Goodfellow, Vice President of Trade and Industry Affairs

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HIGHLIGHTS

  • US-Mexico: A USMCA dispute panel sided with the United States on all seven legal claims in a dispute challenging Mexico’s 2023 presidential corn decree.
  • Trade Remedies:
    • Cargill filed an antidumping and countervailing duty petition to investigate U.S. imports of erythritol from China. Erythritol is a natural zero-calorie sugar alternative which is made by fermenting a corn substrate.
    • Meanwhile, on Dec. 26, Brazil announced an AD investigation into another refined corn product — feed-grade lysine — from China.
    • China’s Ministry of Commerce announced a safeguard investigation on global beef imports. China imported $14.2 billion worth of fresh, chilled, and frozen beef in 2023, of which $1.5 billion was imported from the United States.
  • Transportation: Negotiations between the International Longshoremen’s Association and the U.S. Maritime Alliance on automation at port terminals are set to resume Jan. 7. The new talks come ahead of the Jan. 15 expiration of the current contract.
  • Food Price Index: The FAO Food Price Index decreased slightly in December, down 0.6 points from its November level, but has been higher than 2023 levels since August.

“The [USMCA corn decree dispute] panel’s ruling reaffirms the United States’ longstanding concerns about Mexico’s biotechnology policies and their detrimental impact on U.S. agricultural exports. It underscores the importance of science-based trade policies that allow American farmers and agricultural producers to compete fairly and leverage their innovation to address climate change and enhance productivity. We look forward to continuing our collaboration with the Mexican government to ensure a level playing field and provide access to safe, affordable, and sustainable agricultural products on both sides of the border.”

—U.S. Trade Representative Katherine Tai

US-Mexico

US-MEXICO-CANADA AGREEMENT (USMCA) DISPUTE ON BIOTECH CORN

  • A USMCA dispute panel sided with the United States on all seven legal claims in a dispute challenging Mexico’s 2023 presidential corn decree.
  • The United States challenged two measures within the corn decree — a ban on the use of genetically engineered corn in dough and tortillas and an instruction to the government to gradually eliminate the use of GE corn for food and animal feed uses.
  • According to a USTR press release, “Under USMCA rules, Mexico has 45 days from the date of the final report to comply with the Panel’s findings.”
    • The USMCA Dispute Settlement text states “disputing Parties shall endeavor to agree on the resolution of the dispute” within 45 days of receipt of a final report. The USMCA text clarifies that a “resolution” can comprise of elimination of the non-conformity or the nullification or impairment, mutually acceptable compensation, or another mutually agreed upon remedy.
  • A joint statement by Mexico’s ministries of economy and agriculture notes disagreement with the panel’s determination, but states that “the Government of Mexico will respect the determination.”
  • Mexico is the largest export market for U.S. corn, reaching nearly $5.4 billion in 2023.

Trade Remedies

ANTIDUMPING (AD) COUNTERVAILING DUTY (CVD) INVESTIGATION OF REFINED CORN PRODUCTS FROM CHINA

  • Cargill filed an AD and CVD petition to investigate U.S. imports of erythritol from China. Erythritol is a natural zero-calorie sugar alternative which is made by fermenting a corn substrate.
  • Meanwhile, on Dec. 26, Brazil announced an AD investigation into another corn-based refined corn product — feed-grade lysine — from China.
  • U.S. imports of erythritol from China peaked in 2021 at more than $102 million (34 million kilograms).
  • In its comments on the petition, the Chinese Ministry of Commerce states the country’s erythritol products “serve as valuable supplements to the demand of the U.S. market. Unless genuine circumstances necessitate investigations in line with WTO regulations and domestic legislation, governments should refrain from intervening through the misuse of trade remedies. Such intervention would not only squander the administrative resources on both ends, but also jeopardize the long-term interests of industrial cooperation of both countries and consumer welfare.”
  • The U.S. International Trade Commission is expected to make a preliminary determination on domestic injury by Jan. 27; the Department of Commerce’s International Trade Administration is expected to make a preliminary CVD determination by May 12 and a preliminary AD determination by July 11.
  • As of July 17, 2024, provisional AD duties are being applied on erythritol from China into the EU.

CHINA SAFEGUARD INVESTIGATION OF BEEF IMPORTS

  • China’s Ministry of Commerce announced a safeguard investigation on global beef imports in response to a petition by the China Animal Agriculture Association and nine provincial associations.
  • According to a USDA report, China imported $14.2 billion worth of fresh, chilled, and frozen beef in 2023, of which $1.5 billion was imported from the United States. Other suppliers were Brazil, Argentina, Australia, Uruguay, and New Zealand.
  • The investigation is expected to be concluded within eight months.

Transportation

US EAST AND GULF COST PORT LABOR NEGOTIATIONS

  • A labor agreement between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance is set to expire on Jan. 15, raising concern about another port strike on the U.S. East and Gulf Coast ports.
  • Negotiations on automation at port terminals are set to resume Jan. 7.
  • As previously reported, President-elect Donald Trump met with ILA representatives in December and issued a statement largely sympathizing with their concerns around automation.

Food Price Index

UN FOOD AND AGRICULTURE ORGANIZATION (FAO) FOOD PRICE INDEX RELEASED

  • The FAO Food Price Index decreased slightly in December, down 0.6 points from its November level.
  • Decreases in indices for sugar, dairy products, vegetable oils, and cereals more than offset increases in the indices for meat.
  • Compared with 2023, the index was lower in 2024 from January to August, but higher than 2023 from August through December.
  • The FAO Food Price Index is a measure of the monthly changes in international prices of a basket of food commodities.